The rent of the apartment per month = $900.
Each year the rent will increase at a rate of 5.5%.
We have to find what will be the rent after 7 years. To find that we will use compound interest formula here.
The formula is ![A = P(1+r)^t](https://tex.z-dn.net/?f=%20A%20%3D%20P%281%2Br%29%5Et%20)
Where, A is the last amount including interest, P = principal amount, r = rate of interest, t = number of years.
Here, P = $900, r = 5.5% =
= 0.055, t = 7
By substituting the values in the formula we will get,
![A = 900(1+0.055)^7](https://tex.z-dn.net/?f=%20A%20%3D%20900%281%2B0.055%29%5E7%20)
![A = 900(1.055)^7](https://tex.z-dn.net/?f=%20A%20%3D%20900%281.055%29%5E7%20)
(Approximately taken upto nearest tenth)
We have got the required answer.
After 7 years the rent will be $1309.2.